Choosing a Commodity Brokerage Firm

November 13, 2017 10:52AM CST

How do you choose a commodity brokerage firm? When you are ready to make an investment in commodity futures, the broker you choose is just as important as the markets you trade.

Finding a firm with the lowest commission rate should not be the first thing on your check list. Although low rates are appealing, remember the old adage “you get what you pay for”. Even if you are an independent trader, making your own decisions and placing all of your orders online, you should do your due diligence to make sure your funds are held at a substantial firm. Go to the firm’s website to find out how long the firm you are considering has been in business. You can also go to www.nfa.com and www.cftc.com to find out if there have been any major disciplinary issues. If you find a listing that raises an eyebrow, call and speak to a firm representative to obtain more details.

After you have formed a solid comfort level with the firm, look at the services available to you. Research, Market Analysis, webinars, etc. What do you have to pay for, and what are you really getting for free?

Another important factor to consider is what order platforms are available? Do you have to pay for the order platform? Be aware of deep discount firms with hidden costs. 

Overall, longevity, experience, and knowledge of the firm and their staff can be the most important factors to look at, and can be the reason that firm will be around for many years to come.

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.